SOUTH AFRICAN POST OFFICE SOC LTD AMENDMENT BILL
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REPUBLIC OF SOUTH AFRICA
SOUTH AFRICAN POST OFFICE
SOC LTD AMENDMENT BILL
(As introduced in the National Assembly (proposed section 75); explanatory summary of
Bill published in Government Gazette No. 36665 of 12 July 2013)
(The English text is the offıcial text of the Bill)
(MINISTER OF COMMUNICATIONS)
[B 24—2013] ISBN 978-1-77597-027-9
No. of copies printed .................................... 1 800GENERAL EXPLANATORY NOTE:
[ ] Words in bold type in square brackets indicate omissions from
existing enactments.
Words underlined with a solid line indicate insertions in
existing enactments.
BILL
To amend the South African Post Office SOC Ltd Act, 2011; so as to update and
transfer pension-related provisions of the South African Post Office from the Post
and Telecommunication-related Matters Act, 1958, to the South African Post Office
SOC Ltd Act, 2011; to provide for the payment of pension benefits to a former
spouse of a member on divorce or the dissolution of a customary marriage; to
improve governance provisions between the Boards of the South African Post
Office SOC Ltd and the South African Postbank Limited; to amend the Post and
Telecommunication-related Matters Act, 1958; and to provide for matters
connected therewith.
E IT ENACTED by the Parliament of the Republic of South Africa, as
B follows:—
Amendment of section 1 of Act 22 of 2011
1. Section 1 of the South African Post Office SOC Ltd Act, 2011 (Act No. 22 of 2011)
(hereinafter referred to as the principal Act), is hereby amended— 5
(a) by the insertion of the following definition after the definition of ‘‘Board’’:
‘‘ ‘child’ has the meaning assigned to it in section 1 of the Children’s
Act, 2005 (Act No. 38 of 2005);’’;
(b) by the substitution for the definition of ‘‘Post Office Act’’ of the following
definition: 10
‘‘ ‘Post and Telecommunication-related Matters Act’ means Post and
Telecommunication-related Matters Act, 1958 (Act No. 44 of 1958);’’;
(c) by the insertion of the following definition after the definition of ‘‘Post
Office’’:
‘‘ ‘Post Office Retirement Fund’ means the postal pension fund 15
established in terms of section 9 of the Post and Telecommunication-
related Matters Act, 1958 (Act No. 44 of 1958);’’; and
(d) by the insertion of the following definition after the definition of ‘‘Public
Finance Management Act’’:
‘‘ ‘rules’ means the statutes or rules of the postal pension fund made 20
under section 10 of the Post and Telecommunication-related Matters Act,
1958 (Act No. 44 of 1958);’’.3
Amendment of section 3 of Act 22 of 2011
2. Section 3 of the principal Act is hereby amended by the substitution for subsection
(1) of the following subsection:
‘‘(1) The South African Post Office SOC Ltd, the postal company contemplated
in section 3 of the [Post Office Act] Post and Telecommunication-related Matters 5
Act, continues to exist as a public company, notwithstanding the repeal by this Act
of provisions in the [Post Office Act] Post and Telecommunication-related Matters
Act relating to the postal company.’’.
Amendment of section 8 of Act 22 of 2011
3. Section 8 of the principal Act is hereby amended— 10
(a) by the substitution in subsection (2) for paragraph (a) of the following
paragraph:
‘‘(a) not more than [11] 10 non-executive members appointed in terms of
section 11[, one of whom must be the managing director of the
Postbank by virtue of his or her office];’’; 15
(b) by the substitution for subsection (5) of the following subsection:
‘‘(5) The Board must upon invitation by the Minister nominate
[non-executive members of the Board] persons for appointment to the
Board of the Postbank, as contemplated in section 14(1)(b) of the
Postbank Act.’’; and 20
(c) by the substitution for subsection (6) of the following subsection:
‘‘(6) [The] If any non-executive members of the Board are appointed
to the Board of the Postbank [are] ,such members are accountable to the
Board of the [Post Office] Postbank in respect of their functions
performed as Board members of the Postbank.’’. 25
Amendment of section 11 of Act 22 of 2011
4. Section 11 of the principal Act is hereby amended by the substitution in subsection
(4) for paragraph (c) of the following paragraph:
‘‘(c) the requirement that [some] members of the Board must be fit and proper
persons [to hold the office of a member of the Board of a banking 30
institution,] as contemplated in section 44(2)(d) of the Banks Act, 1990 (Act
No. 94 of 1990)[, for purposes of section 8(5)]; and’’.
Insertion of sections 21A to 21I in Act 22 of 2011
5. The following sections are hereby inserted after section 21 of the principal Act:
‘‘Continued existence of Post Office Retirement Fund 35
21A. The Post Office Retirement Fund continues to exist, despite the
repeal of the provisions relating to such fund in the Post and Telecommu-
nication-related Matters Act.
Rules of Post Office Retirement Fund
21B. (1) The control and management of the Post Office Retirement 40
Fund, the conditions for admission to and termination of membership, the
amount and nature of contributions by members and contributions and
other payments by the Post Office, the benefits due to members and other
beneficiaries, and the manner in which the rules may be amended, must be
governed by the rules, subject to subsection (2). 45
(2) The rules of the Post Office Retirement Fund including any
amendment, substitution or repeal thereof must be made by the Post Office
Retirement Fund subject to the approval of the Minister granted with the
concurrence of the Minister of Finance.
(3) Any amendment, substitution or repeal of the rules of the Post Office 50
Retirement Fund must be published by the Minister in the Gazette within 30
days of approval as contemplated in subsection (2).
(4) The rules bind the Post Office Retirement Fund, its members and
beneficiaries as well as the Post Office.4
Actuarial valuation of Post Office Retirement Fund
21C. (1) The Post Office Retirement Fund appoints an actuary in terms of
the rules.
(2) The Post Office Retirement Fund must be valued by an actuary at
intervals not exceeding three years. 5
(3) The actuary referred to in subsection (1) must submit a report that
complies with the requirements set out in section 16(7) of the Pension Fund
Act,1956 (Act No. 24 of 1956), to the Minister and Minister of Finance.
(4) A copy of the report referred to in subsection (3) must be submitted by
the actuary to the Post Office. 10
(5) In compliance with the requirements of section 16(7) of the Pension
Funds Act, 1956, the actuary shall calculate, and mention in his or her
report, what amounts are necessary to maintain the Post Office Retirement
Fund in a sound financial position.
(6) The Post Office guarantees the financial obligations of the Post Office 15
Retirement Fund.
Prohibition against cession, encumbrance or attachment of pension
benefits
21D. (1) No pension or lump sum from the Post Office Retirement Fund,
or right to such a benefit, or right in respect of contributions made by, or on 20
behalf of a member, may be ceded, pledged or hypothecated, or be attached
or subjected to any form of execution under a judgment or order of a court
of law, except in terms of a court order made in accordance with the
provisions of section 7(8)(a) of the Divorce Act, 1979 (Act No. 70 of 1979),
or a decree for the dissolution of a customary marriage. 25
(2) In the event of a member or other beneficiary attempting to cede,
pledge or hypothecate a benefit or right thereto, payment of the benefit may
be withheld, suspended or entirely discontinued by the Post Office
Retirement Fund in its discretion: Provided that the fund may, during such
period as it may determine, make payment of such benefit or of any benefit 30
in pursuance of such contributions or part thereof to one or more of the
dependants of a member or other beneficiary or to a curator for such
dependant or dependants.
(3) Notwithstanding subsections (1) and (2), the Post Office Retirement
Fund may on the date of a member’s retirement or the date on which he or 35
she ceases to be a member of the fund, deduct—
(a) any amount due to the Post Office Retirement Fund in respect of a loan
granted by the fund in terms of its rules to a member or beneficiary,
from any benefit to which the member or beneficiary is entitled in
terms of such rules; 40
(b) any amount due by a member to the Post Office or a subsidiary of the
Post Office in respect of—
(i) any loan granted by the Post Office or a subsidiary of the Post
Office to such member at his or her request;
(ii) any amount for which the Post Office is liable in terms of a 45
guarantee furnished in respect of a loan granted by some other
person to the member for the purchase of land or a dwelling or
the erection, alteration, improvement, maintenance or repair of
a dwelling for occupation by the member or a dependant of the
member; 50
(iii) compensation (including the legal costs recoverable from the
member in a matter contemplated in subparagraph (ii)) in
respect of any damage caused to the Post Office or a subsidiary
of the Post Office, by reason of any theft, dishonesty, fraud,
misconduct or negligence by the member; 55
(iv) any other written agreement between the member and the Post
Office or a subsidiary of the Post Office in respect of a study
bursary or training of the member; or5
(v) any other amounts due by a member to the Post Office or a
subsidiary of the Post Office, from any benefit payable to the
member or a beneficiary in terms of the rules of the Post Office
Retirement Fund, and pay such amount to the Post Office or a
subsidiary of the Post Office; 5
(c) any amount which the Post Office Retirement Fund, the Post Office or
a subsidiary of the Post Office has paid or will pay by an arrangement
with, or on behalf of, a member or beneficiary in respect of—
(i) such member’s or beneficiary’s subscription to a medical
scheme registered otherwise than provisionally in terms of the 10
Medical Schemes Act, 1998 (Act No. 131 of 1998); or
(ii) any insurance premium payable by such member or benefi-
ciary to an insurer registered in terms of the Long-term
Insurance Act, 1998 (Act No. 52 of 1998), or the Short-term
Insurance Act, 1998 (Act No. 53 of 1998), from any benefit to 15
which the member or beneficiary is entitled in terms of the
rules of the Post Office Retirement Fund and pay such amount,
if due, to the Post Office, medical scheme or insurer, as the case
may be.
Insolvency of beneficiary 20
21E. (1) If the estate of any person (hereafter referred to as the
beneficiary) in receipt of a benefit from the Post Office Retirement Fund is
sequestrated or surrendered or assigned for the benefit of his or her
creditors, payment of such benefit may forthwith be discontinued, and may
thereafter in the discretion of the Post Office Retirement Fund in whole or 25
in part be paid to or for the benefit of all or any of the following persons,
namely:
(a) the beneficiary, his spouse (whether by statutory, customary or
religious law), and including a life partner who is a person living with
that person as if they were married to each other; or 30
(b) child, including an adopted child or a step-child or, failing a spouse or
child, to any other family member dependent upon the beneficiary:
Provided that if the payment is made to the beneficiary, it must be for his or
her own personal use and, notwithstanding anything to the contrary
contained in any law relating to insolvency, such payment must not in any 35
way be attached or appropriated by the trustee of his or her insolvent estate
or by his or her creditors.
(2) If payment of a benefit has been discontinued under this section, such
pension must revive on the rehabilitation of the beneficiary or on the
sequestration of his or her estate being set aside or the claims of his or her 40
creditors being satisfied, and he or she must receive such benefit at the same
rate and subject to the same conditions as before the sequestration,
surrender or assignment, together with any arrears that may be due.
Registration of Post Office Retirement Fund under Pension Funds Act
21F. (1) The Registrar of Pension Funds may at the request of the Post 45
Office Retirement Fund, subject to the approval of the Minister, after
consultation with the Minister of Finance, register the Post Office
Retirement Fund in terms of section 4 of the Pension Funds Act, 1956 (Act
No. 24 of 1956), and may, for the purposes of such request, regard the Post
Office Retirement Fund as a ‘‘pension fund organisation’’ as defined in 50
section 1 of the Pension Funds Act,1956.
(2) From the date of such registration—
(a) the whole of the Pension Funds Act, 1956, applies to the Fund;
(b) sections 21C(1), (2), (3), (4) and (5), 21D and 21E cease to apply to the
Post Office Retirement Fund; and 55
(c) the Post Office Retirement Fund, for the purposes of the Income Tax
Act, 1962 (Act No. 58 of 1962), may not be regarded as a pension fund
as defined in paragraph (a) of the definition of ‘‘pension fund’’ in
section 1 of the Income Tax Act, 1962.6
Membership of employees of subsidiary companies
21G. (1) If the Post Office establishes a subsidiary, an employee of the
Post Office who is transferred or seconded to such subsidiary company
continues to enjoy membership of the Post Office Retirement Fund.
(2) Any employee employed by a subsidiary after the date of its 5
establishment, becomes a member of the Post Office Retirement Fund or, if
the subsidiary company makes use of another pension fund, the other fund.
Taxation
21H. (1) Notwithstanding the repeal of section 8 of the Post and
Telecommunication-related Matters Act by section 5 of the South African 10
Post Office SOC Ltd Amendment Act, 2013, the following rights and
benefits contemplated in subsection 8(4) of the Post and Telecommunica-
tion-related Matters Act continue to exist as if those sections have not been
repealed.
(2) For the purposes of the provisions of the Income Tax Act, 1962 (Act 15
No. 58 of 1962) (as amended from time to time), is deemed that no change
of employer took place when employment was taken up at the Post Office
or subsidiary of the Post Office by officers and employees of the then
Department of Posts and Telecommunications and that the position of the
officers and employees in respect of the phasing in of any tax levied on 20
benefits or advantages derived by reason of employment or the holding of
office as contemplated in Schedule 7 to the Income Tax Act, 1962, remains
unchanged.
Payment of pension interest upon divorce or dissolution of customary
marriage 25
21I. (1) The Post Office Retirement Fund must reduce a member’s
pension interest by any amount assigned from the member’s pension
interest to the member’s former spouse in terms of a decree of divorce
granted under section 7(8)(a) of the Divorce Act, 1979 (Act No. 70 of
1979), or a decree for the dissolution of a customary marriage. 30
(2) (a) Subject to paragraph (j), for purposes of section 7(8)(a) of the
Divorce Act, 1979 (Act No. 70 of 1979), the portion of a member’s pension
interest assigned to the member’s former spouse in terms of a decree of
divorce or a decree for the dissolution of a customary marriage is deemed
to accrue to the member on the date on which the decree of divorce or the 35
decree for the dissolution of a customary marriage is granted.
(b) The amount of the member’s pension interest in the Post Office
Retirement Fund must be determined and the amount of the member’s
pension interest that is assigned to the former spouse must be calculated by
the Post Office Retirement Fund in accordance with the rules as at the date 40
of the decree of divorce or the decree for the dissolution of a customary
marriage.
(c) Prior to determining the amount of the member’s pension interest that
is assigned to the former spouse, the amount of the member’s pension
interest referred to in paragraph (b) must first be reduced in accordance with 45
the rules by any amount of the member’s pension interest which, in a
previous divorce or a previous dissolution of a customary marriage, was
paid over or awarded to another party.
(d) The amount of any pension benefit that is subsequently payable to the
member in terms of the rules must be reduced by the equivalent of the 50
amount of the share of the pension interest of the member which—
(i) was deemed to accrue to the member as a benefit in advance of the
benefit ordinarily payable in terms of the rules; and
(ii) was assigned to the member’s former spouse,
less the amount of any additional voluntary contributions, if any, paid by 55
the member to the Post Office Retirement Fund from time to time, and
accumulated over the period from the date on which payment to the former
spouse or transfer to the approved Post Office Retirement Fund as referred7
to in paragraph (e) took place to the date on which the member first became
entitled to a part or the whole of the balance of the benefit, with interest as
the Board from time to time deems appropriate.
(e) The Post Office Retirement Fund must, within 45 days of the
submission of the court order by the former spouse of a member, request the 5
former spouse to elect whether the amount to be deducted must be—
(i) paid directly to the former spouse; or
(ii) transferred to an approved retirement fund on behalf of the former
spouse.
(f) The former spouse must, within 120 days of being requested to make 10
a choice—
(i) inform the Post Office Retirement Fund of the manner in which the
amount referred to in paragraph (e) must be dealt with; and
(ii) if the former spouse chooses that the amount must be paid to the
former spouse directly, provide the Post Office Retirement Fund with 15
the details that are necessary to effect the payment; or
(iii) if the former spouse chooses that the amount must be transferred to an
approved pension fund on his or her behalf, provide the Post Office
Retirement Fund with the details of that approved retirement fund.
(g) The Post Office Retirement Fund must pay or transfer the amount 20
within 60 days of being informed of the manner in which the amount must
be dealt with in accordance with the former spouse’s choice.
(h) In the event that the former spouse fails to make a choice or identify
the approved retirement fund to which the amount must be transferred
within the period referred to in paragraph (f), the Post Office Retirement 25
Fund must pay the amount directly to the former spouse within 30 days of
the expiry of that period.
(i) Despite paragraph (h), in the event that the Post Office Retirement
Fund cannot reasonably ascertain the manner in which the payment to the
former spouse must be effected, the Post Office Retirement Fund must 30
retain the amount plus interest in the Post Office Retirement Fund, until
such time as details of the manner in which that payment must be effected
is made available to the Post Office Retirement Fund by the member, the
former spouse or any other person whom the Post Office Retirement Fund
is satisfied has the necessary authority and capacity to instruct the Post 35
Office Retirement Fund in that respect.
(j) Any portion of a member’s pension interest assigned to a former
spouse in terms of a decree of divorce or a decree for the dissolution of a
customary marriage granted prior to the enactment of this subsection must,
for purposes of any law other than the Income Tax Act, 1962 (Act No. 58 of 40
1962), including, but not limited to, section 7(8)(a) of the Divorce Act,
1979 (Act No. 70 of 1979), be deemed to have accrued to the member on
the date of enactment of this subsection, and must be paid or transferred in
accordance with paragraphs (a) to (i).’’.
Amendment of laws 45
6. The law mentioned in Schedule 1 is hereby amended to the extent set out in the
third column of that Schedule.
Short Title
7. This Act is called the South African Post Office SOC Ltd Amendment Act, 2013.8
SCHEDULE
LAWS AMENDED
Act No. and Year Short Title Extent of amendment or Repeal
Act No. 44 of Post and Tele- 1. Amendment of section 1—
1958 communication- (a) by the substitution for the definition of
Related Matters ‘‘Companies Act’’ of the following defi-
Act, 1958 nition:
‘‘ ‘Companies Act’ means the Com-
panies Act, [1973 (Act No. 61 of
1973)] 2008 (Act No. 71 of 2008);’’;
(b) by the deletion of the definitions of
‘‘postal company’’; ‘‘postal employer’’;
‘‘postal pension fund’’; ‘‘postal service’’;
and ‘‘postal transfer date’’;
(c) by the substitution for the definition of
‘‘successor company’’ of the following
definition:
‘‘ ‘successor company’ means the
telecommunications company incorpo-
rated as contemplated in section 3(1)[,
and for the purpose of the definition
of ‘‘officer’’, and section 5, Chapter
1B and sections 12U and 12W in-
cludes the postal company].’’.
2. Amendment of section 5—
(a) by the substitution for the heading of the
following heading:
‘‘Shareholding in successor [compa-
nies] company’’
(b) by the substitution for subsection (1) of
the following subsection:
‘‘(1) As a consideration for the
transfer contemplated in section 4(1)
[each] the successor company shall, in
addition to the share referred to in sec-
tion 3(4)(a), issue such shares in
[those companies] the company to the
State as the Minister with the concur-
rence of the Minister of Finance may
determine: Provided that the nominal
value plus any premium payable in
respect of all the shares so issued by
[each] the company, shall be equal to
the net asset value of the enterprise
[concerned].’’;
(c) by the substitution for subsection (3) of
the following subsection:
‘‘(3) Shares issued in terms of this
section shall have such nominal value
and shall be issued at such premium, if
any, as the Minister with the concur-
rence of the Minister of Finance may
determine and shall be issued as fully
paid by the transfer to the successor
company [concerned] of assets and
liabilities with a net asset value equal
to the nominal value of the shares plus
any such premium.’’;9
Act No. and Year Short Title Extent of amendment or Repeal
(d) by the substitution for subsection (4) of
the following subsection:
‘‘(4) Any dividends received by the
State in respect of shares in [a] the
successor company shall be paid into
the State Revenue Fund.’’;
(e) by the substitution for subsection (5) of
the following subsection:
‘‘(5) No stamp duty shall be paid by
[a] the successor company in respect
of the issue of shares to the State in
terms of this Act.’’; and
(f) by the substitution for subsection (6) of
the following subsection:
‘‘(6) No money shall be paid by [a]
the successor company in terms of sec-
tion [63 or 75] 13 or 16 of the Compa-
nies Act in respect of the creation of,
or any increase in, the capital of such a
company.’’.
3. The repeal of sections 8 and 8A.
4. The substitution for section 9 of the fol-
lowing section:
‘‘Establishment of pension [funds] fund
9. (1) From the date of commencement
of the Post Office Amendment Act, 1991,
there [are] is hereby established [a postal
pension fund and] a telecommunications
pension fund.
(2) [Both the]The [funds] fund referred
to in subsection (1) shall be a juristic per-
son[s].’’.
5. The substitution for section 10 of the
following section:
‘‘Pension statutes
10. (1) The control and management of
the [postal pension fund and the] tele-
communications pension fund, the condi-
tions for admission to and termination of
membership of [each] the fund, the
amount and nature of contributions by
members and contributions and other pay-
ments by the [postal employer or the]
telecommunications employer, the benefits
due to members and other beneficiaries,
and the manner in which the statutes may
be amended, shall be governed by the stat-
utes of [each] the fund[, as the case may
be].
(2) The statutes of [each] the fund shall
be published by the Minister in the Gazette
and shall come into operation on the
[postal transfer date in the case of the
postal pension fund and on the] telecom-
munications transfer date [in the case of
the telecommunications pension fund].10
Act No. and Year Short Title Extent of amendment or Repeal
(3) Until the date of registration of the
[postal pension fund and the] telecom-
munications pension fund, [as the case
may be,] in terms of section 10D, any
amendment of the statutes of the pension
fund [concerned] shall be subject to the
approval of the Minister granted with the
concurrence of the Minister of Finance.
(4) The statutes of the [postal pension
fund and the] telecommunications pen-
sion fund shall be binding on [each] the
fund as well as the [postal employer and
the] telecommunications employer, [as the
case may be,] and on the members and
beneficiaries of [each] the fund.’’.
6. Amendment of section 10A—
(a) by the substitution for subsection (1) of
the following subsection:
‘‘Actuarial evaluation of pension
[funds] fund
10A. (1) The [postal pension fund
and the] telecommunications pension
fund shall [each] be valued by an ac-
tuary, appointed by the Minister,
within three years from the date on
which the fund [concerned] was es-
tablished, and thereafter [each] the
fund shall be valued by such actuary at
intervals not exceeding three years, as
the Minister may determine.’’;
(b) by the substitution for subsection (3) of
the following subsection:
‘‘(3) A copy of the report shall be
submitted by the actuary to the em-
ployer [concerned].’’; and
(c) by the deletion of subsections 5, 6 and 7.
7. Substitution for section 10B of the fol-
lowing section:
‘‘Pension benefits may not be ceded,
encumbered or attached
10B. (1) No pension or lump sum from
a pension fund referred to in section 10, or
right to such a benefit, or right in respect
of contributions made by, or on behalf of,
a member, may be ceded, pledged or hy-
pothecated, or be attached or subjected to
any form of execution under a judgment or
order of a court of law, except in terms of
a court order made in accordance with the
provisions of section 7(8)(a) of the Di-
vorce Act, 1979 (Act No. 70 of 1979), or a
decree for the dissolution of a customary
marriage, and in the event of the benefi-
ciary attempting to cede, pledge or hypoth-
ecate a benefit or right thereto, payment of
the benefit may be withheld, suspended or
entirely discontinued by the pension fund11
Act No. and Year Short Title Extent of amendment or Repeal
[concerned] in its discretion: Provided
that the pension fund [concerned] may,
during such period as it may determine,
make payment of such benefit or of any
benefit in pursuance of such contributions
or part thereof to one or more of the
dependants of the beneficiary or to a cura-
tor for such dependant or dependants.
(2) Notwithstanding the provisions of
subsection (1), the pension fund [con-
cerned] may on the date of a member’s
retirement or the date on which he ceases
to be a member of the fund, deduct—
(a) any amount due to that fund in respect
of a loan granted by that fund in terms
of its statutes to a member or benefi-
ciary, from any benefit to which the
member or beneficiary is entitled in
terms of such statutes;
(b) any amount due by a member to his
employer in respect of—
(i) any loan granted by the employer
to such member at his request;
(ii) any amount for which the em-
ployer is liable in terms of a guar-
antee furnished in respect of a
loan granted by some other person
to the member for the purchase of
land or a dwelling or the erection,
alteration, improvement, mainte-
nance or repair of a dwelling for
occupation by the member or a
dependant of the member;
(iii) compensation (including the le-
gal costs recoverable from the
member in a matter contemplated
in subparagraph (ii)) in respect of
any damage caused to the em-
ployer, by reason of any theft,
dishonesty, fraud, misconduct or
negligence by the member;
(iv) any other written agreement be-
tween the member and the em-
ployer in respect of a study bur-
sary, training of the member or
the military service obligations of
the member,
from any benefit payable to the mem-
ber or a beneficiary in terms of the
statutes of that fund, and pay such
amount to the employer [concerned];
(c) any amount which such fund or the
employer has paid or will pay by an
arrangement with, or on behalf of, a
member or beneficiary in respect of—
(i) such member’s or beneficiary’s
subscription to a medical scheme
registered otherwise than provi-
sionally in terms of the Medical
Schemes Act, [1967 (Act No. 72 of
1967)] 1998 (Act No. 131 1998);
(ii) any insurance premium payable by
such member or beneficiary to an12
Act No. and Year Short Title Extent of amendment or Repeal
insurer registered in terms of the [In-
surance Act, 1943 (Act No. 27 of
1943)], Long-Term Insurance Act,1998
(Act No. 52 of 1998), or Short-Term
Insurance Act, 1998 (Act No. 53 of
1998),
from any benefit to which the member or
beneficiary is entitled in terms of the stat-
utes of that fund and pay such amount, if
due, to such employer, medical scheme or
insurer, as the case may be.’’.
Amendment of section 10C—
8. by the substitution for subsection (1) of
the following subsection:
‘‘(1) If the estate of any person in re-
ceipt of a pension from a pension fund
referred to in section 9 is sequestrated or
surrendered or assigned for the benefit of
his creditors, payment of the pension shall
forthwith be discontinued, and shall there-
after in the discretion of the pension fund
[concerned] in whole or in part be paid to
or for the benefit of all or any of the fol-
lowing persons, namely, the pensioner, his
wife or minor child or, failing a wife or
minor child, to the mother of an illegiti-
mate child or any child, whether legiti-
mate, adopted or illegitimate, or to any
other relative dependent upon the pen-
sioner: Provided that if the payment is
made to the pensioner, it shall be for his
own personal use and, notwithstanding
anything to the contrary contained in any
law relating to insolvency, such payment
shall not in any way be attached or appro-
priated by the trustee of his insolvent es-
tate or by his creditors.’’.
9. The substitution for section 10D of the
following section:
‘‘Registration of pension [funds] fund
10D. (1) The Registrar of Pension Funds
may at the request of the [postal pension
fund or the] telecommunications pension
fund register the pension fund [concerned]
in terms of section 4 of the Pension Funds
Act, 1956 (Act No. 24 of 1956), and may,
for the purposes of such request, regard
such pension fund as a ‘‘pension fund or-
ganization’’ as defined in section 1 of the
said Act.
(2) From the date of such registration—
(a) the whole of the Pension Funds Act,
1956, shall apply to the pension fund
[concerned];
(b) the provisions of sections 10, 10A (1),
(2), (3) and (4), 10B and 10C of this
Act shall cease to apply to the pension
fund [concerned]; and13
Act No. and Year Short Title Extent of amendment or Repeal
(c) the pension fund [concerned] shall,
for the purposes of the Income Tax
Act, 1962 (Act No. 58 of 1962), not be
regarded as a pension fund as defined
in paragraph (a) of the definition of
‘‘pension fund’’ in section 1 of the said
Act.’’.
10. The substitution for section 10E of the
following section:
‘‘Membership of pension fund by em-
ployees of subsidiary [companies] com-
pany
10E. (1) If [a] the successor company
establishes a subsidiary company in terms
of section 4(9), an employee of the succes-
sor company who is transferred or sec-
onded to such subsidiary company, shall
continue to enjoy membership of the pen-
sion fund [concerned] of which he was a
member immediately before the date of his
transfer or secondment.
(2) Any employee employed by a sub-
sidiary company after the date of its estab-
lishment, shall become a member of the
[postal pension fund or the] telecommu-
nications pension fund, [as the case may
be,] subject to the statutes of [such] the
fund.’’.
11. Insertion of the following section after
section 10E:
‘‘Payment of pension interest upon di-
vorce or dissolution of customary mar-
riage
10F. (1) The Board must direct the Fund
to reduce a member’s pension interest by
any amount assigned from the member’s
pension interest to the member’s former
spouse in terms of a decree of divorce
granted under section 7(8)(a) of the Di-
vorce Act, 1979 (Act No. 70 of 1979), or a
decree for the dissolution of a customary
marriage.
(2) (a) Subject to paragraph (j), for pur-
poses of section 7(8)(a) of the Divorce
Act, 1979 (Act No. 70 of 1979), the por-
tion of a member’s pension interest as-
signed to the member’s former spouse in
terms of a decree of divorce or a decree
for the dissolution of a customary marriage
is deemed to accrue to the member on the
date on which the decree of divorce or the
decree for the dissolution of a customary
marriage is granted.
(b) The amount of the member’s pen-
sion interest in the Fund must be deter-
mined and the amount of the member’s
pension interest that is assigned to the
former spouse must be calculated by the14
Act No. and Year Short Title Extent of amendment or Repeal
Fund in accordance with the Rules as at
the date of the decree of divorce or the
decree for the dissolution of a customary
marriage.
(c) Prior to determining the amount of
the member’s pension interest that is as-
signed to the former spouse, the amount of
the member’s pension interest referred to
in paragraph (b) must first be reduced in
accordance with the rules by any amount
of the member’s pension interest which, in
a previous divorce or a previous dissolu-
tion of a customary marriage, was paid
over or awarded to another party.
(d) The amount of any pension benefit
that is subsequently payable to the member
in terms of the Rules will be reduced by
the equivalent of the amount of the share
of the pension interest of the member
which—
(i) was deemed to accrue to the member
as a benefit in advance of the benefit
ordinarily payable in terms of the
rules; and
(ii) was assigned to the member’s former
spouse, less the amount of any addi-
tional voluntary contributions, if any,
paid by the member to the Fund from
time to time, and accumulated over the
period from the date on which pay-
ment to the former spouse or transfer
to the approved fund as referred to in
paragraph (e) took place to the date on
which the member first became en-
titled to a part or the whole of the bal-
ance of the benefit, with interest as the
Board from time to time deems appro-
priate.
(e) The Fund must, within 45 days of
the submission of the court order by the
former spouse of a member, request the
former spouse to elect whether the amount
to be deducted must be—
(i) paid directly to the former spouse; or
(ii) transferred to an approved retirement
fund on behalf of the former spouse.
(f) The former spouse shall, within 120
days of being requested to make a
choice—
(i) inform the Fund of the manner in
which the amount referred to in para-
graph (e) must be dealt with; and
(ii) if the former spouse chooses that the
amount must be paid to the former
spouse directly, provide the Fund with
the details that are necessary to effect
the payment; or
(iii) if the former spouse chooses that the
amount must be transferred to an ap-
proved pension fund on his or her
behalf, provide the Fund with the de-
tails of that approved retirement fund.15
Act No. and Year Short Title Extent of amendment or Repeal
(g) The Fund must pay or transfer the
amount within 60 days of being informed
of the manner in which the amount shall
be dealt with in accordance with the
former spouse’s choice.
(h) In the event that the former spouse
fails to make a choice or identify the ap-
proved retirement fund to which the
amount should be transferred within the
period referred to in paragraph (f), the
Fund shall pay the amount directly to the
former spouse within 30 days of the expiry
of that period.
(i) Despite paragraph (h), in the event
that the Fund cannot reasonably ascertain
the manner in which the payment to the
former spouse must be effected, the Fund
shall retain the amount plus interest as
determined by the Board in the Fund, until
such time as details of the manner in
which that payment must be effected is
made available to the Fund by the mem-
ber, the former spouse or any other person
whom the Fund is satisfied has the neces-
sary authority and capacity to instruct the
Fund in that respect.
(j) Any portion of a member’s pension
interest assigned to a former spouse in
terms of a decree of divorce or a decree
for the dissolution of a customary marriage
granted prior to the enactment of this sub-
section shall, for purposes of any law other
than the Income Tax Act, 1962 (Act No.
58 of 1962), including, but not limited to,
section 7(8)(a) of the Divorce Act, 1979
(Act No. 70 of 1979), be deemed to have
accrued to the member on the date of en-
actment of this subsection, and must be
paid or transferred in accordance with
paragraphs (a) to (i).’’.
12. Amendment of section 12U—
(a) by the substitution for the heading of the
following heading:
‘‘12U. Loans to [postal company
and] telecommunications com-
pany.’’;
(b) by the deletion of subsection (1);
(c) by the substitution for subsection (3) of
the following subsection:
‘‘(3) The amounts owing to the State
by the [postal company and the] tele-
communications company, [respec-
tively,] in terms of the excluded com-
mitments contemplated in
[subsections (1) and] subsection (2),
shall bear interest at the rate at which,
and shall be repaid to the State within
the period for which, the department
borrowed the money in terms of the
agreement concerned.’’ ; and16
Act No. and Year Short Title Extent of amendment or Repeal
(d) by the substitution for subsection (4) of
the following subsection:
‘‘(4) For the purposes of the transfer
by the department to the [postal com-
pany and the] telecommunications
company of the loans made to the de-
partment by the State in terms of the
Exchequer Act, 1975 (Act No. 66 of
1975)—
(a) the amount described in section 28
of the Exchequer Act, 1975, as
permanent capital, shall notwith-
standing the provisions of the said
section be deemed to be a loan
made by the State to the depart-
ment which shall be converted on
the transfer date [concerned] into
ordinary shares held by the State
in the successor company [con-
cerned]: Provided that the nomi-
nal value and any premium pay-
able in respect of the shares so
issued shall be determined by the
Minister with the concurrence of
the Minister of Finance and shall
in the aggregate be equal to the
total amount of the permanent
capital;
(b) the department shall to the extent
of such transfer be released from
any debt or obligation to the State
in respect of such loans.’’.
13. Substitution for section 12W of the
following section:
‘‘Financial instruments
12W. (1) Subject to the provisions of
subsections (2) and (3) and notwithstand-
ing anything to the contrary contained in
the Companies Act, [the postal company
and] the telecommunications company
may, for as long as the majority of their
issued equity shares are held by the State,
issue stock, securities, bills, promissory
notes, debentures, debenture stock, obliga-
tions or other financial instruments as
proof of a loan of money and may negoti-
ate or have them listed in the same manner
and on the same financial markets or on
the same stock exchange as is customary
in the case of similar financial instruments
issued by the State.
(2) Financial instruments referred to in
subsection (1) shall only be issued with the
approval of the Minister.
(3) Any financial instruments issued by
[a] the successor company before the com-
mencement of this section and which pur-
ported to be public stock or bonds issued
by the Director-General in terms of section
12I(1)(b), shall be deemed to be financial
instruments issued by the company [con-
cerned] in terms of subsection (1).17
Act No. and Year Short Title Extent of amendment or Repeal
(4) Public stock or bonds which imme-
diately prior to the deletion of section 12U
(5) by the Posts and Telecommunications
Acts Amendment Act, 1992, were in terms
of the said provision deemed to be deben-
tures issued by the successor company
[concerned], shall be deemed to be finan-
cial instruments issued by the company
[concerned] in terms of subsection (1).
(5) The provisions of the Companies
Act in respect of debentures shall, subject
to subsection (8), not apply to financial
instruments referred to in subsections (1),
(3) and (4).
(6) [A] The successor company may
engage in commercial transactions of
whatever nature, including repurchase
agreements, in respect of its own financial
instruments and similar financial instru-
ments issued by the State or other institu-
tions.
(7) [A] The successor company shall, as
far as possible, keep a register of all finan-
cial instruments referred to in subsections
(1), (3) and (4).
(8) Stock referred to in subsections (1),
(3) and (4) may be transferred by means of
a securities transfer form in the manner
referred to in [section 135] sections 51 and
53 of the Companies Act, and the stock
certificate issued by the successor com-
pany [concerned] in respect of such trans-
fer shall be prima facie evidence of the
right to such stock of the person named
therein as the holder of such stock.
(9) No levy, tax, stamp duty, fees or
other costs of whatever nature shall be
payable in respect of the issue or transfer
of any financial instrument referred to in
subsections (1), (3) and (4).
(10) No provision of this section shall
be construed as derogating from the pow-
ers of [a] the successor company in terms
of its memorandum of [association or its
articles] incorporation and under the pro-
visions of the Companies Act, to issue,
negotiate or list any financial instrument as
proof of the loan of money.’’.18
MEMORANDUM ON THE OBJECTS OF THE SOUTH AFRICAN
POST OFFICE SOC LTD AMENDMENT BILL, 2013
1. BACKGROUND
1.1 The Post Office Pension Fund was established on 1 October 1991 in terms of
section 9 of the Post and Telecommunication-related Matters Act, 1958 (Act
No. 44 of 1958) (‘‘the PTMA’’). It was renamed the Post Office Retirement
Fund (PORF) in 2005. It is a juristic person and is managed by a Board of
Trustees as a separate legal entity. The PORF must act in accordance with
pension-related provisions of the PTMA and is managed and controlled in
accordance with pension statutes or rules promulgated under section 10 of the
said Act.
1.2 It is necessary to transfer the pension-related provisions of the PTMA to the
South African Post Office SOC Ltd Act, 2011 (Act No. 22 of 2011) (‘‘the
SAPOA’’), where it is more suitably placed. The South African Post Office
SOC Ltd Amendment Bill, 2013 (‘‘the Bill’’), will amend the SAPOA for this
purpose.
1.3 The rules of the PORF, currently, do not allow a former spouse of a member
to claim a portion of a member’s pension interest, in terms of a divorce order
or an order for the dissolution of a customary marriage, soon after the divorce
order or the order for the dissolution of a customary marriage is granted. The
former spouse can only receive a portion of the member’s interest after the
exit of the member from the PORF.
1.4 The rules of the PORF cannot be amended due to the provision in sections
10B of the PTMA that provides that:
‘‘10B.—(1) No pension or lump sum from a pension fund referred to in
section 10, or right to such a benefit, or right in respect of contributions
made by, or on behalf of, a member, may be ceded, pledged or
hypothecated, or be attached or subjected to any form of execution under a
judgment or order of a court of law . . .’’
1.5 The Bill will correct this prohibition in order to provide for the implementa-
tion of the ‘‘clean-break’’ principle.
1.6 The Pension Funds Amendment Act, 2007 (Act No. 11 of 2007), incorporated
the ‘‘clean-break’’ principle into the Pension Funds Act, 1956 (Act No. 24 of
1956) (‘‘the PFA’’), as section 37D(1)(d), (3)(b), (4) and (5). The ‘‘clean-
break’’ principle allows for the non-member spouse to claim and receive a
portion of the member’s interest that is assigned in terms of the divorce order
or the order for the dissolution of a customary marriage, soon after the divorce
order or the order for the dissolution of the customary marriage has been
granted. The former spouse does not have to wait until the member exits the
pension fund.
1.7 A new section 21I is inserted into the SAPOA to give effect to the
‘‘clean-break’’ principle and section 21D is inserted to enable the PORF to
amend its rules accordingly.
2. OBJECTS OF THE BILL
The Bill seeks to amend the SAPOA, to achieve the following objectives:
(a) to update and transfer pension-related provisions of the South African Post
Office from the PTMA to the SAPOA;
(b) to enable the payment of a pension interest to a former spouse of a member on
divorce or the dissolution of a customary marriage;
(c) to improve governance provisions between the Boards of the Post Office and
Postbank in the context of the holding company and subsidiary relationship;19
(d) to ensure that members of the Board must be fit and proper persons as
contemplated in the Banks Act; and
(e) to amend the PTMA.
3. CLAUSE BY CLAUSE ANALYSIS
The Bill contains the following clauses:
3.1 Clause 1
Clause 1 of the Bill seeks to insert new definitions for ‘‘child’’, ‘‘Post and
Telecommunication-related Matters Act’’, ‘‘Post Office Retirement Fund’’ and
‘‘rules’’.
3.2 Clause 2
Clause 2 of the Bill seeks to amend section 3 of the Act by substituting Post
Office Act for Post and Telecommunication-related Matters Act.
3.3 Clause 3
Clause 3 seeks to amend section 8(2)(a), to remove the requirement that the
managing director of the Postbank is one of the members of the Board by
virtue of his or her office. The fiduciary duties of the managing director of the
Postbank should not extend to the entire affairs of the holding company since
his or her focus should be on the affairs of the Postbank. Even though the King
Code of Governance Principles (King III), Chapter 2, paragraph 144 provides
that it is acceptable for a CEO of a subsidiary company to be appointed a
director on the holding company board, it also states that the fiduciary duties
of the director are to the company to which he or she has been appointed. This
amendment is necessary to avoid conflict of interest.
Clause 3 further seeks to amend section 8(5) by removing the requirement that
the Board, when recommending persons for appointment to the Board of the
Postbank, must nominate non-executive members of the Board of the Post
Office. This amendment is required since the appointment criteria for
members of the Boards of the Post Office and the Postbank respectively, are
different. This is especially so in the context of the fit and proper requirement
under the banking legislation that applies to members of the Postbank Board.
Clause 3 further seeks to amend section 8(6) by making it clear that if any
non-executive members of the Board are appointed to the Board of the
Postbank, such members are accountable to the Board of the Postbank in
respect of their functions performed as Board members of the Postbank. This
amendment is made in line with King III, Chapter 2, paragraph 142 that
provides as follows:
‘‘The holding company must recognise the fiduciary duties of the subsidiary
company’s directors and particularly their duty to act in the best interest of
the subsidiary company at all times whether or not the director is
nominated to the board of the subsidiary company by the holding
company.’’.
3.4 Clause 4
Clause 4 of the Bill seeks to amend section 11(4)(c) to ensure that all members
of the Board must be fit and proper persons to manage the affairs of the Post
Office in its capacity of a controlling company of a bank, as contemplated in
section 44 of the Banks Act, 1990 (Act No. 94 of 1990). This amendment is
also a consequential amendment following the amendment of section 8(5).20
3.5 Clause 5
Clause 5 of the Bill seeks to insert the following provisions that are necessary
to ensure the continued existence of the PORF and matters relevant thereto:
3.5.1 Continued existence of Post Office Retirement Fund
This clause seeks to provide for the continued existence of the PORF.
The PORF refers to the retirement fund of the Post Office that was
established on 1 October 1991 in terms of section 9 of the PTMA. It is
a juristic person and is administered and governed by a Board of
Trustees. This clause is necessary to ensure the PORF’s continued
existence despite the repeal of section 9 of the said Act by this Bill.
3.5.2 Rules of the Fund
This clause, read with the definition of Rules seeks to provide for the
continued existence of the Statutes or Rules of the PORF made under
section 10 of the PTMA, despite the repeal of that section by this Bill.
It further provides for the control and management of the Fund, the
conditions for admission to and termination of membership, the
amount and nature of contributions by members and contributions and
other payments by the Post Office, the benefits due to members and
other beneficiaries, and the manner in which the Rules may be
amended.
3.5.3 Actuarial Valuation of the Fund
This clause is necessary to ensure that the financial sustainability and
feasibility of the PORF is adequately and properly measured and
monitored. It directs how the required funding level is maintained.
3.5.4 Prohibition against cession, encumbrance or attachment of pen-
sion benefits
This clause is similar to section 37D of the PFA and is necessary to
preserve, protect and safeguard the benefits of the members of the
PORF during their membership and when they exit the Fund. It also
allows the PORF to make certain lawful and regular deductions from
the benefits of the members, when such members cease to be members
or when they exit the Fund upon retirement. This clause also enables
the PORF to amend its Rules to give effect to the ‘‘clean-break’’
principle.
3.5.5 Insolvency of a beneficiary
This clause seeks to protect, preserve and safeguard the benefits of
members of the PORF against claims of creditors. This provision
ensures that pension benefits may not be attached if a beneficiary
becomes insolvent, which benefits revive after rehabilitation, the
sequestration being set aside or claims of creditors being satisfied.
3.5.6 Registration of the Fund under the Pension Fund Act
This clause is based on section 10D of the PTMA and is necessary to
enable the PORF to convert to a private pension fund by registering as
such under the PFA, subject to the approval of the Minister of
Communications, after consultation with the Minister of Finance. This
provision is required since it is foreseen that statutory funds may in
future be required to become private funds in terms of the PFA.21
3.5.7 Membership of employees of subsidiary companies
This clause enables members of the PORF to remain members despite
being transferred or seconded to a subsidiary company of the Post
Office. It further allows employees of the subsidiary to become
members of the Fund if the subsidiary company does not make use of
another pension fund.
3.5.8 Taxation
This clause ensures that the rights and benefits contemplated in
subsection 8(4) of the PTMA in respect of tax continue to exist despite
the repeal of that section by this Bill. The tax rights and benefits apply
to officers and employees of the then Department of Posts and
Telecommunications (now Communications) that were transferred to
the Post Office and must continue until all such officers and employees
have exited the PORF.
3.5.9 Payment of pension interest upon divorce or dissolution of
customary marriage
This clause has been proposed by the Constitutional Court of South
Africa in the matter of PRP Ngewu to give effect to the ‘‘clean-break’’
principle (7 February 2013, case number 117/11) and is similar to
section 24A of the Government Employees Pension Law, 1996
(Proclamation 21 of 1996).
3.6 Clause 6
Clause 6 of the Bill provides for the repeal of the law mentioned in Schedule
1 to the Act.
3.7 Clause 7
Clause 7 of the Bill contains the short title.
4. ORGANISATIONS AND INSTITUTIONS CONSULTED
The Bill resulted from a consultative process between the Department of
Communications, the South African Post Office SOC Ltd and the Post Office
Retirement Fund.
5. FINANCIAL IMPLICATIONS
The implementation of the ‘‘clean-break’’ principle is not anticipated to have any
new financial implications for government or the South African Post Office SOC
Ltd.
6. CONSTITUTIONAL IMPLICATIONS
The amendments in the Bill that seek to provide for the implementation of the
‘‘clean-break’’ principle will address the disparity regarding the implementation of
the ‘‘clean-break’’ principle between the PORF and other Pension Funds that are
regulated in terms of the PFA. This has been the subject of a constitutional
challenge in the High Court case of Mathilda Wiese and the GEPF and others as
well as the pending case of PRP Ngewu and the PORF. The Constitutional Court of
South Africa postponed the Ngewu case to 07 February 2013 in view of an
undertaking by the Minister of Communications to table the amendments
contemplated in this Bill in Parliament in the 2012 Legislative Programme.22
7. PARLIAMENTARY PROCEDURE
7.1. The State Law Advisers and the Department of Communications are of the
opinion that the Bill must be dealt with in accordance with the procedure
established by section 75 of the Constitution, since it contains no provision to
which the procedure set out in section 74 or 76 of the Constitution applies.
7.2. The State Law Advisers are of the opinion that it is not necessary to refer this
Bill to the National House of Traditional Leaders in terms of section 18(1)(a)
of the Traditional Leadership and Governance Framework Act, 2003 (Act No.
41 of 2003), since it does not contain provisions pertaining to customary law
or customs of traditional communities.Printed by Creda Communications ISBN 978-1-77597-027-9
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